What is elimination of recourse?
If fiduciary liability premiums were not paid from plan assets, but paid instead by the trustees themselves, the insurance companies would not have the ability to subrogate (attempt to recover a paid claim amount) against insureds. It is only because premiums are commonly paid from plan assets, that the subrogation against insureds is possible. This is called the company’s right of recourse against insureds. Eliminating this right of recourse prevents the company from subrogating against an insured trustee whose unintentional error causes a loss.
